Delay on Hinkley decision

Thursday, August 25, 2016

The UK’s new administration has announced a review of the £18bn Hinkley Point new nuclear project before making a final decision this Autumn. This followed the decision by EDF to approve its funding. Greg Clark, New Energy Secretary said: “The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix. The government will now consider carefully all the component parts of this project and make its decision in the early autumn.”

Unsurprisingly, supporters of the project are dismayed by the apparent ‘pause’ and reappraisal. A key concern being whether it is an examination of the project to reassure a new administration before making a major decision or whether it is a signal of a change of policy. Those against the project have emphasised the increasing costs and value for money to the electricity consumer. There are also issues around major cost and time overruns on the construction of the same reactor type at Flamanville in France and Olkiluoto in Finland.

Jean-Bernard Levy, Group chief executive at EDF said: “I have no doubt about the support of the British government led by Mrs May.”

Theresa May told the French President, Francois Hollande, last week that she needed more time to make a final decision. However, Mrs May also sought to reassure him that the review was “not a sign of opposition,” saying “I have just become Prime Minister. It is my method.”

China General Nuclear said in a statement: “We respect the new Government’s need to familiarise itself with a project as important to the UK’s future energy security as Hinkley Point C and we stand ready to help the Government in this respect.”

It is now being reported that the ruling socialist party in France is supporting trade union leaders in their opposition to project on the grounds that the project could threaten the financial viability of the main developer, EDF. It seems the future for the project now depends on the outcome of a three way ‘tussle’ between key French and Chinese investors and the UK government, the outcome of which is unlikely to satisfy everyone.